Weekly Newsletter   Challenge account


Posted by Martin September 06, 2021
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August 2021 $100 Challenge account review


August ended for our Challenge account. It was a successful month though. Although our account is still very young and is growing slowly, it is already showing signs of speeding up. We still hold our option position which is affecting our net-liquidation value but as the trade progresses towards expiration, it will make our Net-Liq going up.

We keep saving cash and trading strangles to generate enough cash to grow our account on top of the dividends and deposits. This is the fate of every small account. Any investor who starts investing with little cash and little to invest every month must exercise a lot of patience. Today, people, young investors want to be rich quick, they dismiss the power of small steps and they want to jump to the big league right away. But small drops of water make the ocean.

What would you prefer? Have small steps, small deposits, and small safe trades compounding over time and growing to a large account, or risk everything at once and eventually blow it all off?

I was there myself. I started learning options from 2010 to 2013. I started trading as a business in 2014. But I wanted to grow my account fast. And I started trading risky trades, like SPX trades. It worked for a while and I quadrupled my money. But then a few bad trades wiped it all out. For five years I was fighting my pride and reality. Just browse through this blog. You will find the entire history of my trading here. My boasting and my failures.

In 2019 I finally came to the realization that everything I was doing was futile. For example, if you want to trade SPX trades, you must have capital available. If you think you can make it with just a $5,000 account, be prepared for a hard awakening. Yes, you may be lucky and you may double or triple your small account. It is called beginner luck. But I can almost guarantee you that at some point in time, you will lose it. Why? Because trading SPX will require trading Iron Condors, unless you have at least $100k or more account available (here come the capitalization question again). And it is no secret that no strategy works always all the time. There will be times when you will have to adjust your Iron Condor to a different trade in order to survive. If you have no capital, you will be doomed to close your trade for a loss. And you start compounding losses, one by one, little by little until you drop to zero. Call it a reversed compounding.

Here is how my account looked like back then:
 

Boom-bust history

 
As you can see, my account could go up for a few years before it went all bust. Two years of winning streak and I felt like a master trader. A master with a bitter end. The worst thing was that there was nothing I could do to stop the bleeding. I could close the positions to take the huge losses right away, or just prolong the bleeding over time. Inevitable end. It was not a matter of if, but how long.

So, you can repeat my mistakes, or learn from them. And that is why I started this challenge account. To show that it is possible to make money with a small account and grow it large, but most importantly, keep the winnings and not blow your account.

 

Accumulation phase

 
The account is slightly underperforming our goal but it is on the path to success. We are now trading small trades (strangles) and we will continue accumulating shares for our next options trade. The strangles are consuming collateral buying power but as they near towards expiration we will see a jump in BP and net-liq.

We are trading strangles because they are easier to manage compared to Iron Condors, but they are also a bit more expensive as far as capital requirements go. That is why choosing good stocks to trade is crucial. Choose safe, stable stocks, providing enough premium and stability. And that is what we are doing.
 

August 2021 Challenge account review

 

MONTH GOAL $$ ACTUAL $$
June 2021: $203.00 $202.67
July 2021: $306.00 $334.75
August 2021: $409.00 $397.71
September 2021: $512.00  
October 2021: $615.00  
November 2021: $718.00  
December 2021: $821.00  
January 2022: $924.00  
February 2022: $1,027.00  
March 2022: $1,130.00  
April 2022: $1,233.00  
May 2022: $1,336.00  

 

$100 Challenge account review

 
From the chart above, the red dot (line) indicates the current account value, compared to the blue line (plan). Our account is trailing our goal. When trading naked options, expect volatility in your net-liq. That can be seen by some as a disadvantage. When trading spreads, your net-liq will be stabilized by neutralizing delta. With naked options, you would have to choose other instruments to do so, for example owning stocks to neutralize your call side. We do not have this yet as our account is small, but we are building our position.
 

August 2021 Overall Challenge account review

 
The chart below indicates our account value compared to the overall goal and plan to grow $100 investment into a $75,000 portfolio. As of today, we are at the beginning of our journey.

YEAR CONTRIBUTIONS $$ GOAL $$ ACTUAL $$
Year 0: $100.00 $100.00 $100.00
Year 1: $1,300.00 $1,336.00 $397.71
Year 2: $2,500.00 $3,016.96  
Year 3: $3,700.00 $5,303.07  
Year 4: $4,900.00 $8,412.17  
Year 5: $6,100.00 $12,640.55  
Year 6: $7,300.00 $18,391.15  
Year 7: $8,500.00 $26,211.96  
Year 8: $9,700.00 $36,848.27  
Year 9: $10,900.00 $51,313.64  
Year 10: $12,100.00 $70,986.56  

 

$100 Challenge account review goal

 

August 2021 Cumulative return Challenge account review

 

As of today, our challenge account provided a -3.43% monthly cumulative return.
 

$100 Challenge account review goal

 
$100 Challenge account review goal

 

If you want to see what investments we take, what trades and strategies we will use to grow this small account join our program today and grow your money too. We engage in safe investments, select strategies to maximize winning trades, and grow our portfolio. And you can do it too, today! We do not provide quick rich promises, gambling, or reckless strategies. We want our portfolio to grow steadily and preserving our capital while maximizing returns.

 

 




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Posted by Martin September 05, 2021
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2021 Week 35 investing and trading report


August is done! Another best month investing and trading dividend growth stocks and options. This month turned up to be absolutely the best as far as Net-Liq growth. This month, our net liquidating value jumped up by a whopping $7,000 dollars! This week we lost -$48.00 in options premiums. It was because of options trades adjustments that we did closing some trades still in August and reopening them in September. But overall, we made $6,133.00 in options premiums in August. And the dividends were even better this month. We received $780.09 in August. The most we ever had. I am happy with the performance of our account. Let’s see how we will perform in September.

September started well too. So far, we have received $469.00 in premiums and $37.60 in dividends.
 

Here is our investing and trading report:

 

Account Value: $82,871.85 $1,598.38 +1.97%
Options trading results
Options Premiums Received: -$48.00    
01 January 2021 Options: $4,209.00 +16.65%  
02 February 2021 Options: $4,884.00 +15.41%  
03 March 2021 Options: $5,258.00 +12.79%  
04 April 2021 Options: $2,336.00 +4.30%  
05 May 2021 Options: $6,346.00 +9.22%  
06 June 2021 Options: $4,677.00 +6.37%  
07 July 2021 Options: $3,865.00 +5.14%  
08 August 2021 Options: $6,133.00 +7.40%  
09 September 2021 Options: $469.00 +0.57%  
Options Premiums YTD: $38,177.00 +46.07%  
Dividend income results
Dividends Received: $144.61    
01 January 2021 Dividends: $53.04    
02 February 2021 Dividends: $63.00    
03 March 2021 Dividends: $30.31    
04 April 2021 Dividends: $139.70    
05 May 2021 Dividends: $167.45    
06 June 2021 Dividends: $168.56    
07 July 2021 Dividends: $228.62    
08 August 2021 Dividends: $780.09    
09 September 2021 Dividends: $37.60    
Dividends YTD: $1,709.85    
Portfolio metrics
Portfolio Yield: 4.55%    
Portfolio Dividend Growth: 8.13%    
Ann. Div Income & YOC in 10 yrs: $19,580.50 18.02%  
Ann. Div Income & YOC in 20 yrs: $165,016.24 151.83%  
Ann. Div Income & YOC in 25 yrs: $760,348.15 699.60%  
Ann. Div Income & YOC in 30 yrs: $5,568,246.11 5,123.38%  
Portfolio Alpha: 39.10%    
Portfolio Weighted Beta: 0.66    
CAGR: 685.35%    
AROC: 46.72%    
TROC: 16.91%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 159.59% Accomplished
2021 Portfolio Value Goal: $42,344.06 195.71% Accomplished

 

Dividend Investing and Trading Report

 
Last week, we have received a $144.61 dividends income. We have enough stock holdings to generate a $4,421.90 annual dividend income.

Last week, our dividend income reached 159.59% of our dividend income goal. We projected to receive $1,071 in dividends in 2021. Our growth was fast and we have received $1,709.85.

Here are our stock holdings that contribute to our dividend income:

 
Annual Dividend Payout week 35
 

Options Investing and Trading Report

 
Last week, we rolled our trades against ABBV. The stock got unexpectedly hammered by an FDA announcement about the side effects of a drug manufactured by ABBV. Of course, the market overreacted as is typical, but we wanted to make sure the trade is always safe, so we rolled it down. We also took the opportunity and bought shares of ABBV.

We also rolled OXY strangle that was in the money. We tried to open a butterfly against AMZN but unfortunately, the stock moved too fast. It moved in our direction and the way we wanted, but too fast so we had to close that trade for a small loss.

We rolled AAPL trade as well, last week. And lastly, we opened a new TSLA put spread.

We plan all new and existing trades to expire worthless. We will roll them only if in danger or they become worthless with a lot of time left in them.
 

You can watch all our trades in this spreadsheet. You can watch the spreadsheet and look for a “NEW” indication next to the trading date. When the indicator shows up, it is typically good for up to 3 days to follow that trade.
 

Expected Future Dividend Income

 
As the table at the beginning of this report indicates, our aggressive dividend growth stocks accumulation is starting to show significant progress in our current and future dividends income. Our portfolio dividend yield and dividend growth will be bringing us almost $165,016.24 in 20 years and $5,568,246.11 in 30 years. I wish, I had that $5.5 million income now. But that is the fate of dividend growth investing. It is not a quick rich scheme and building an account takes time.

We will keep aggressively accumulating dividend growth stocks to generate liveable income sooner than in 20 years. And the portfolio is starting to show this to be happening. In just 10 years, we will start receiving $19,580.50 in today’s dollars. It is not bad considering that in March 2021 it was only $3,202.52 in projected future dividends.

 
Our projected annual dividend income in 10 years is $19,580.50 but that is if we do absolutely nothing and let our positions grow on their own.

We are also set to receive a $4,421.90 annual dividend income. We are 22.58% of our 10 year goal!

 
Future Divi on YOC week 35
 

The chart above shows how our future dividend income is based on the future yield on cost and what dividend income we may expect in the future. The expected dividend growth depends on what stocks we are adding to our portfolio and the stocks’ 3 years average dividend growth rate. It is interesting to see what passive income we may enjoy 10, 20, 25, or 30 years from now.

 

Market value of our holdings

 
Our non-adjusted stock holdings market value increased from $114,902.05 to $118,145.31.

It is nice to see how options help our stock holdings. Without trading options, our stock holdings would be up by $9,462.18 only. With options that offset our cost basis, our stock holdings are up by $20,454.18

As the markets and businesses continue growing, we expect the value of our holdings to grow even more. We are also building cash reserves to buy depressed stocks during selloffs and corrections as well as negative analysts reports (as long as the company is still good long term).

 
Stock holdings week 35
 

We are accumulating the dividend growth stocks (and some income-only stocks) not only to build a strong dividend income but also to create a “rental property” in our portfolio that can be monetized and generate additional income. This strategy will also provide safety for our strangles and cover our call side.

Our goal is to accumulate 100 shares of each stock of our interest and we are getting to that goal.
 

Investing and trading ROI

 

Our options trading delivered a 7.40% monthly ROI in August 2021, totaling a 46.07% ROI YTD. We exceeded our 45% annual revenue selling options against dividend stocks target!

Our account grew by 302.83% beating our projections and the market.
 

Our options trading averaged $4,241.89 per month this year. If this trend continues, we are on track to make $50,902.67 trading options in 2021. As of today, we have made $38,177.00 trading options. We are over halfway of the projected annual income.
 

Old SPX trades repair

 

This week, we didn’t adjust any SPX trades. Our goal is to reach a level that we will be eligible for portfolio margin (PM). Once that happens, we plan on converting the existing SPX Iron Condors to strangles and trade these positions as strangles.

With RegT margin, the capital requirements would be approx. $66,586.06 and that is beyond our means. With PM the requirement for margin would drop to around $10k. That is doable in our account. Once we reach this level, we will start adjusting our SPX trades accordingly. Until then, we will just roll these trades around.

 

Accumulating Growth Stocks

 

Last week, we didn’t buy any new growth stocks. We however decided to start accumulating 2x and 3x leveraged ETFs. We bought 10 shares of SSO and 2 shares of SPXL. We also placed a stop loss to protect our downside and hopefully, let these ETFs run-up. We plan on accumulating up to 20% of our entire portfolio in these ETFs. Then we will manage the position by trimming any exceeds and accumulating when we get below the desired target.

 

Accumulating Dividend Growth Stocks

 

Last week, we added 10 shares of ABBV taking the advantage of the stock’s selloff. And we added 10 shares of ICSH.

In the upcoming weeks, we will continue to accumulate the higher yield income stocks to boost our income and reinvest the proceeds but within our share purchasing plan for the rest of the year (see above section).

Our goal is to reach 100 shares of high-quality dividend stocks and build a weekly dividend income as per this calendar, but we have made no changes to this goal last week:
 

Weekly dividends income calendar
 
You can see the entire spreadsheet here.

 

Market Outlook

 

The S&P 500 is still in a strong uptrend but it is showing signs of a slowdown.

There is still no resistance for S&P500, so the sky is the limit. The support is at $4,407 and it is a weak buy this week.

I expect the market to reach $4,570 by the end of September but it may change.
 

SPX prediction next week

 

If you want to learn more about the stock market, events that moved the market last week and will likely impact it in the near future, I recommend you to subscribe to our weekly newsletter. Knowing where the market is heading and knowing when you should expect its reversal can benefit your trading and investing. Subscribe and you get one month free.

 

Investing and trading report in charts

 

Account Net-Liq

 

TW Account Net-Liq week 35

 

Account Stocks holding

 
TW Account holdings week 35
 

Our stock holdings still do not beat the market but I am positive that the growth will pick up and exceeds the market. We just need time and continue reinvesting the proceeds. S&P 500 grew 56.79% since we opened our portfolio while our portfolio grew 20.94% only. On YTD basis, the S&P 500 grew 26.94% and our portfolio 13.95%.

But the numbers above apply to our stock holdings in our account, not the overall account net-liq growth. Our overall account beats the market growing by 302.83%!
 

Stock holdings Growth YTD

 
TW Account holdings Growth YTD
 

I expect our stock holdings to start outperforming the market as they mature. However, these are just our stock holdings. The entire portfolio beats the market by far thanks to monetizing those positions.

Our goal is to grow this account to $1,000,000.00 value in ten years. We are in year two.

 

Investing and Trading Report – Options Monthly Income

 
TW Options Income week 35
 

Investing and Trading Report – Options Annual Income

 

TW Options Annual Income week 35
 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 35
 

We have accomplished our dividend income goal. We planned to make $1,071 of dividend income this year and we finished receiving $1,709.85. However, we accumulated enough shares to start making $4,421.90 a year.
 

TW Received vs Future Dividends week 35

 

Our account cumulative return

 

The chart below indicates our cumulative adjusted return. It shows how the last week’s selloff shook down our returns but we are recovering along with the market.
 

TW cumulative return wk 35
 

TW win ratio wk 35
 

As of today, our account cumulative return is 44.42% (note, data in this section are since March 13, 2021, only as that is the date we started tracking these metrics. Thus the results are skewed a bit and will show full picture next year.).

 

Conclusion of our investing and trading report

 

This week our options trading was within our expectations and I believe, the rest of the month will be even better.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares and continue building our cash reserves so we have enough cash to sustain any market corrections and be able to buy depressed stocks.

We will report our next week’s results next Saturday. Until then, good luck and good trading!




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Posted by Martin August 28, 2021
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2021 Week 34 investing and trading report


Last week of August (we will have a few days of August next week) and here is our weekly investing and trading report. Our account net-liq recovered from last week and created a new all-time high same as Nasdaq that broke up from a consolidation pattern and closed in a new all-time high too.

August turned out to be our second best month ever trading stock options. We made $6,181.00 this month. It was a bit shy of May’s income that reached $6,346.00. But the month is not completely over. We will have Monday and Tuesday next week. We still may be able to add additional income.

This month was also our best month in dividend income. We made over $600 in August in dividends.
 

Here is our investing and trading report:

 

Account Value: $81,273.47 $3,722.07 4.80%
Options trading results
Options Premiums Received: $1,657.00    
01 January 2021 Options: $4,209.00 +16.65%  
02 February 2021 Options: $4,884.00 +15.41%  
03 March 2021 Options: $5,258.00 +12.79%  
04 April 2021 Options: $2,336.00 +4.30%  
05 May 2021 Options: $6,346.00 +9.22%  
06 June 2021 Options: $4,677.00 +6.37%  
07 July 2021 Options: $3,865.00 +5.14%  
08 August 2021 Options: $6,181.00 +7.61%  
Options Premiums YTD: $37,756.00 +46.46%  
Dividend income results
Dividends Received: $0.00    
01 January 2021 Dividends: $53.04    
02 February 2021 Dividends: $63.00    
03 March 2021 Dividends: $30.31    
04 April 2021 Dividends: $139.70    
05 May 2021 Dividends: $167.45    
06 June 2021 Dividends: $168.56    
07 July 2021 Dividends: $228.62    
08 August 2021 Dividends: $635.48    
Dividends YTD: $1,527.64    
Portfolio metrics
Portfolio Yield: 4.62%    
Portfolio Dividend Growth: 8.13%    
Ann. Div Income & YOC in 10 yrs: $19,399.37 18.39%  
Ann. Div Income & YOC in 20 yrs: $166,234.77 157.62%  
Ann. Div Income & YOC in 25 yrs: $776,315.49 736.07%  
Ann. Div Income & YOC in 30 yrs: $5,788,821.57 5,488.69%  
Portfolio Alpha: 39.33%    
Portfolio Weighted Beta: 0.68    
CAGR: 693.79%    
AROC: 34.56%    
TROC: 17.32%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 142.58% Accomplished
2021 Portfolio Value Goal: $42,344.06 191.94% Accomplished

 

Dividend Investing and Trading Report

 
Last week, we have received a $0.00 dividends income. We have enough stock holdings to generate a $4,309.68 annual dividend income.

Last week, our dividend income reached 142.58% of our dividend income goal. We projected to receive $1,071 in dividends in 2021. Our growth was fast and we have received $1,527.64.

Here are our stock holdings that contribute to our dividend income:

 
Annual Dividend Payout week 34
 

Options Investing and Trading Report

 
Last week we rolled options that got in trouble. Rolling trades make us the most cash income, although not always that income is available to withdraw due to buying power collateral. The biggest trouble but also money maker was again BABA. We rolled our strangles to lower our puts as it seems, BABA is on the way down to $100 a share. So we wanted to give our trade more room to absorb this downtrend. We also rolled trades such as BEPC, AXP, and DKNG.

We also opened a few new trades against the previously expired trades such as AES, ABBV, KBE, O, and WEN strangles. Some trades couldn’t be opened (such as IJS, to APAM) because our broker restricted trading with these stocks due to fraudulent stock market manipulation. So we opened trades against AAPL and BA instead. A few new trades that were added on top of the reopened trades were a new trade against DKNG and OXY.
 

You can watch all our trades in this spreadsheet. You can watch the spreadsheet and look for a “NEW” indication next to the trading date. When the indicator shows up, it is typically good for up to 3 days to follow that trade.
 

Expected Future Dividend Income

 
As the table at the beginning of this report indicates, our aggressive dividend growth stocks accumulation is starting to show significant progress in our current and future dividends income. Our portfolio dividend yield and dividend growth will be bringing us almost $166,234.77 in 20 years and $5,788,821.57 in 30 years. I wish, I had that $5.7 million income now. But that is the fate of dividend growth investing. It is not a quick rich scheme and building an account takes time.

We will keep aggressively accumulating dividend growth stocks to generate liveable income sooner than in 20 years. And the portfolio is starting to show this to be happening. In just 10 years, we will start receiving $19,399.37 in today’s dollars. It is not bad considering that in March 2021 it was only $3,202.52 in projected future dividends.

 
Our projected annual dividend income in 10 years is $19,399.37 but that is if we do absolutely nothing and let our positions grow on their own.

We are also set to receive a $4,309.68 annual dividend income. We are 22.22% of our 10 year goal!

 
Future Divi on YOC week 34
 

The chart above shows how our future dividend income is based on the future yield on cost and what dividend income we may expect in the future. The expected dividend growth depends on what stocks we are adding to our portfolio and the stocks’ 3 years average dividend growth rate. It is interesting to see what passive income we may enjoy 10, 20, 25, or 30 years from now.

 

Market value of our holdings

 
Our non-adjusted stock holdings market value increased from $106,171.06 to $114,902.05.

As the markets and businesses continue growing, we expect the value of our holdings to grow even more. We are also building cash reserves to buy depressed stocks during selloffs and corrections as well as negative analysts reports (as long as the company is still good long term).

 
Stock holdings week 34
 

We are accumulating the dividend growth stocks (and some income-only stocks) not only to build a strong dividend income but also to create a “rental property” in our portfolio that can be monetized and generate additional income. This strategy will also provide safety for our strangles and cover our call side.

Our goal is to accumulate 100 shares of each stock of our interest and we are getting to that goal.
 

Investing and trading ROI

 

Our options trading delivered a 7.61% monthly ROI in August 2021, totaling a 46.46% ROI YTD. We exceeded our 45% annual revenue selling options against dividend stocks target!

Our account grew by 295.06% beating our projections and the market.
 

Our options trading averaged $4,719.50 per month this year. If this trend continues, we are on track to make $56,634.00 trading options in 2021. As of today, we have made $37,756.00 trading options. We are over halfway of the projected annual income.
 

Old SPX trades repair

 

This week, we didn’t adjust any SPX trades. Our goal is to reach a level that we will be eligible for portfolio margin (PM). Once that happens, we plan on converting the existing SPX Iron Condors to strangles and trade these positions as strangles.

With RegT margin, the capital requirements would be approx. $66,586.06 and that is beyond our means. With PM the requirement for margin would drop to around $10k. That is doable in our account. Once we reach this level, we will start adjusting our SPX trades accordingly. Until then, we will just roll these trades around.

 

Accumulating Growth Stocks

 

Last week, we added 1 share of AMZN to our holdings.

Our plan for the rest of the year is to accumulate cash. We only add dividend growth stocks when an opportunity shows up. Our rule for the rest of the year is to use 20% of our available buying power that is above $2,000 to buy new shares per week. The rest of the BP will be kept intact to grow our cash reserves.

 

Accumulating Dividend Growth Stocks

 

Last week, we added 20 shares of ICSH, 4 shares of AAPL, 10 shares of VICI, 5 shares of MU, and 25 shares of AES.

In the upcoming weeks, we will continue to accumulate the higher yield income stocks to boost our income and reinvest the proceeds but within our share purchasing plan for the rest of the year (see above section).

Our goal is to reach 100 shares of high-quality dividend stocks and build a weekly dividend income as per this calendar, but we have made no changes to this goal last week:
 

Weekly dividends income calendar
 
You can see the entire spreadsheet here.

 

Market Outlook

 

The market rallied last week and created new all-time highs. At first, the market was muted by expected Powell’s speech in Jackson Hole in Wyoming and when Powell assured us that FED will pretty much do nothing as far as tapering (possibly some bond purchasing program reduction), the markets rallied again.

It was in fact obvious that even if Powell said something markets would not like, it would be shrugged off and we will rally again.

Our expectation was that S&P 500 reaches $4,500 during the last week of August and in September. We expected mostly flat movement. The market hit the target in the middle of the week.

 
Market Outlook week 34
 

We think the market will gain momentum for the rest of August and the first half of September 2021. It then may cool down a bit. But we think S&P 500 will reach the $4,600 mark by September 27th.

 
Market Outlook week 34
 

There is still no resistance for S&P500, so the sky is the limit. The support is at $4,377. The market’s trend is still bullish. It may change in the future, but it hasn’t changed yet.
 

Want to learn more about our market outlook? We publish a weekly newsletter where we review all economic activities that may have impacted the market and provide market outlook and expectations. Subscribe here to receive a newsletter every week.

 

Investing and trading report in charts

 

Account Net-Liq

 

TW Account Net-Liq week 34

 

Account Stocks holding

 
TW Account holdings week 34
 

Our stock holdings still do not beat the market but I am positive that the growth will pick up and exceeds the market. We just need time and continue reinvesting the proceeds. S&P 500 grew 55.89% since we opened our portfolio while our portfolio grew 21.20% only. On YTD basis, the S&P 500 grew 26.04% and our portfolio 14.22%.

But the numbers above apply to our stock holdings in our account, not the overall account net-liq growth. Our overall account beats the market growing by 295.06%!
 

Stock holdings Growth YTD

 
TW Account holdings Growth YTD
 

I expect our stock holdings to start outperforming the market as they mature. However, these are just our stock holdings. The entire portfolio beats the market by far thanks to monetizing those positions.

Our goal is to grow this account to $1,000,000.00 value in ten years. We are in year two.

 

Investing and Trading Report – Options Monthly Income

 
TW Options Income week 34
 

Investing and Trading Report – Options Annual Income

 

TW Options Annual Income week 34
 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 34
 

We have accomplished our dividend income goal. We planned to make $1,071 of dividend income this year and we finished receiving $1,527.64. However, we accumulated enough shares to start making $4,309.68 a year.
 

TW Received vs Future Dividends week 34

The chart above shows that our dividend holdings caught up with the dividend payout cycle and we started receiving monthly dividends as projected.

 

Our account cumulative return

 

The chart below indicates our cumulative adjusted return. It shows how the last week’s selloff shook down our returns but we are recovering along with the market.
 

TW cumulative return wk 34
 

TW win ratio wk 34
 

As of today, our account cumulative return is 41.63% (note, data in this section are since March 13, 2021, only as that is the date we started tracking these metrics. Thus the results are skewed a bit and will show full picture next year.).

 

Conclusion of our investing and trading report

 

This week our options trading was within our expectations and I believe, the rest of the month will be even better.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares and continue building our cash reserves so we have enough cash to sustain any market corrections and be able to buy depressed stocks.

We will report our next week’s results next Saturday. Until then, good luck and good trading!




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Posted by Martin August 22, 2021
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2021 Week 33 investing and trading report


Another week of August is over. We had our server migrated on Saturday and our website was down the entire day! This investing and trading report shows that it was again a successful week! At first, it looked like a dull week but then the market started sell-off throwing a taper tantrum over FEDs meeting minutes and everything changed. I make the most money rolling and adjusting trades than the original ones.

Last week we received a large dividend from our holdings. It was a surprise. That makes August our best month of dividend income so far! Our options income also jumped up significantly in the second half of the week bringing August to be the 6th best month in options income. But August is not over yet! We have two more weeks to trade! And, we had 11 trades that expired last Friday that we will be reopening next week. These trades will deliver additional options income.

Our Net-Liq dropped, however, due to the market turmoil. But at this point, it doesn’t matter to me. The pullback is temporary.
 

Here is our investing and trading report:

 

Account Value: $77,551.40 -$1,899.31 -2.39%
Options trading results
Options Premiums Received: $2,327.00    
01 January 2021 Options: $4,209.00 +16.65%  
02 February 2021 Options: $4,884.00 +15.41%  
03 March 2021 Options: $5,258.00 +12.79%  
04 April 2021 Options: $2,336.00 +4.30%  
05 May 2021 Options: $6,346.00 +9.22%  
06 June 2021 Options: $4,677.00 +6.37%  
07 July 2021 Options: $3,865.00 +5.14%  
08 August 2021 Options: $4,524.00 +5.83%  
Options Premiums YTD: $36,099.00 +46.55%  
Dividend income results
Dividends Received: $168.07    
01 January 2021 Dividends: $53.04    
02 February 2021 Dividends: $63.00    
03 March 2021 Dividends: $30.31    
04 April 2021 Dividends: $139.70    
05 May 2021 Dividends: $167.45    
06 June 2021 Dividends: $168.56    
07 July 2021 Dividends: $228.62    
08 August 2021 Dividends: $635.48    
Dividends YTD: $1,527.64    
Portfolio metrics
Portfolio Yield: 4.72%    
Portfolio Dividend Growth: 8.13%    
Ann. Div Income & YOC in 10 yrs: $18,917.72 19.05%  
Ann. Div Income & YOC in 20 yrs: $166,773.41 167.93%  
Ann. Div Income & YOC in 25 yrs: $796,831.62 802.36%  
Ann. Div Income & YOC in 30 yrs: $6,127,104.50 6,169.59%  
Portfolio Alpha: 39.56%    
Portfolio Weighted Beta: 0.66    
CAGR: 689.54%    
AROC: 47.92%    
TROC: 21.74%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 142.58% Accomplished
2021 Portfolio Value Goal: $42,344.06 183.15% Accomplished

 

Dividend Investing and Trading Report

 
Last week, we have received a $168.07 dividends income. We have enough stock holdings to generate a $4,282.26 annual dividend income.

Last week, our dividend income reached 142.58% of our dividend income goal. We projected to receive $1,071 in dividends in 2021. Our growth was fast and we have received $1,527.64.

Here are our stock holdings that contribute to our dividend income:

 
Annual Dividend Payout week 33
 

Options Investing and Trading Report

 
Last week we rolled options that got in trouble. Rolling trades make us the most cash income, although not always that income is available to withdraw due to buying power collateral. The biggest trouble but also money maker was again BABA. We rolled our strangles to lower our puts as it seems, BABA is on the way down to $100 a share. So we wanted to give our trade more room to absorb this downtrend.

We had 11 trades that expired on August 20th. Next week, we will re-enter these trades (tickers). We will only replace the expired trades and we will not be adding any new ones for the rest of the year to consolidate our gains and account.
 

You can watch all our trades in this spreadsheet. You can watch the spreadsheet and look for a “NEW” indication next to the trading date. When the indicator shows up, it is typically good for up to 3 days to follow that trade.
 

Expected Future Dividend Income

 
As the table at the beginning of this report indicates, our aggressive dividend growth stocks accumulation is starting to show significant progress in our current and future dividends income. Our portfolio dividend yield and dividend growth will be bringing us almost $166,773.41 in 20 years and $6,127,104.50 in 30 years. I wish, I had that $6.2 million income now. But that is the fate of dividend growth investing. It is not a quick rich scheme and building an account takes time.

We will keep aggressively accumulating dividend growth stocks to generate liveable income sooner than in 20 years. And the portfolio is starting to show this to be happening. In just 10 years, we will start receiving $18,917.72 in today’s dollars. It is not bad considering that in March 2021 it was only $3,202.52 in projected future dividends.

 
Our projected annual dividend income in 10 years is $18,917.72 but that is if we do absolutely nothing and let our positions grow on their own.

We are also set to receive a $4,282.26 annual dividend income. We are 22.64% of our 10 year goal!

 
Future Divi on YOC week 33
 

The chart above shows how our future dividend income is based on the future yield on cost and what dividend income we may expect in the future. The expected dividend growth depends on what stocks we are adding to our portfolio and the stocks’ 3 years average dividend growth rate. It is interesting to see what passive income we may enjoy 10, 20, 25, or 30 years from now.

 

Market value of our holdings

 
Our non-adjusted stock holdings market value increased from $103,867.40 to $106,171.06.

As the markets and businesses continue growing, we expect the value of our holdings to grow even more. We are also building cash reserves to buy depressed stocks during selloffs and corrections as well as negative analysts reports (as long as the company is still good long term).

 
Stock holdings week 33
 

We are accumulating the dividend growth stocks (and some income-only stocks) not only to build a strong dividend income but also to create a “rental property” in our portfolio that can be monetized and generate additional income. This strategy will also provide safety for our strangles and cover our call side.

Our goal is to accumulate 100 shares of each stock of our interest and we are getting to that goal.
 

Investing and trading ROI

 

Our options trading delivered a 5.83% monthly ROI in July 2021, totaling a 46.55% ROI YTD. We exceeded our 45% annual revenue selling options against dividend stocks target!

Our account grew by 276.97% beating our projections and the market.
 

Our options trading averaged $4,512.38 per month this year. If this trend continues, we are on track to make $54,148.50 trading options in 2021. As of today, we have made $36,099.00 trading options. We are over halfway of the projected annual income.
 

Old SPX trades repair

 

This week, we didn’t adjust any SPX trades. Our goal is to reach a level that we will be eligible for portfolio margin (PM). Once that happens, we plan on converting the existing SPX Iron Condors to strangles and trade these positions as strangles.

With RegT margin, the capital requirements would be approx. $66,586.06 and that is beyond our means. With PM the requirement for margin would drop to around $10k. That is doable in our account. Once we reach this level, we will start adjusting our SPX trades accordingly. Until then, we will just roll these trades around.

 

Accumulating Growth Stocks

 

Last week, we added 1 share of TSLA and 2 shares of SNOW to our holdings.

Our plan for the rest of the year is to accumulate cash. We only add dividend growth stocks when an opportunity shows up. Our rule for the rest of the year is to use 20% of our available buying power that is above $2,000 to buy new shares per week. The rest of the BP will be kept intact to grow our cash reserves.

 

Accumulating Dividend Growth Stocks

 

Last week, we added 6 shares of VICI, 25 shares of ICSH, 50 shares of PMT, and 5 shares of TD.

In the upcoming weeks, we will continue to accumulate the higher yield income stocks to boost our income and reinvest the proceeds but within our share purchasing plan for the rest of the year (see above section).

Our goal is to reach 100 shares of high-quality dividend stocks and build a weekly dividend income as per this calendar, but we have made no changes to this goal last week:
 

Weekly dividends income calendar
 
You can see the entire spreadsheet here.

 

Market Outlook

 

The S&P 500 is in a strong uptrend and even a little taper tantrum the market threw at us because of FED’s meeting minutes talking about possible tapering (talking, not doing!) didn’t derail this trend.

 
Market Outlook week 33
 

There is still no resistance for S&P500, so the sky is the limit. The support is at $4,353. The market’s intrinsic value is at $4,259 for the rest of 2021 and the trend is still bullish. It may change in the future, but it hasn’t changed yet.

The market priced in the earnings season that was one of the best seasons since 2009 and now we are entering a dull period until Jay Powell planned speech in Jackson Hole on August 27th. I expect the market zig-zagging through that time, going nowhere. The speech will give us a clue on the next FED’s monetary policy. That can shake the market.

 
Market Outlook week 33
 

I expect the market to reach $4,500 by the end of August but it may change.

 

Investing and trading report in charts

 

Account Net-Liq

 

TW Account Net-Liq week 32

 

Account Stocks holding

 
TW Account holdings week 33
 

Our stock holdings still do not beat the market but I am positive that the growth will pick up and exceeds the market. We just need time and continue reinvesting the proceeds. S&P 500 grew 53.55% since we opened our portfolio while our portfolio grew 18.81% only. On YTD basis, the S&P 500 grew 23.70% and our portfolio 11.82%.

But the numbers above apply to our stock holdings in our account, not the overall account net-liq growth. Our overall account beats the market growing by 276.97%!
 

Stock holdings Growth YTD

 
TW Account holdings Growth YTD
 

I expect our stock holdings to start outperforming the market as they mature. However, these are just our stock holdings. The entire portfolio beats the market by far thanks to monetizing those positions.

Our goal is to grow this account to $1,000,000.00 value in ten years. We are in year two.

 

Investing and Trading Report – Options Monthly Income

 
TW Options Income week 33
 

Investing and Trading Report – Options Annual Income

 

TW Options Annual Income week 33
 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 33
 

We have accomplished our dividend income goal. We planned to make $1,071 of dividend income this year and we finished receiving $1,527.64. However, we accumulated enough shares to start making $4,282.26 a year.
 

TW Received vs Future Dividends week 33

The chart above shows that our dividend holdings caught up with the dividend payout cycle and we started receiving monthly dividends as projected. For August 2021 the projection was $439.75 and we have received $635.48. For September, our projection is $392.97. If we receive this income (or more), it will confirm that we are now in line with projections.

 

Our account cumulative return

 

The chart below indicates our cumulative adjusted return. It shows how the last week’s selloff shook down our returns but we are recovering along with the market.
 

TW cumulative return wk 33
 

TW win ratio wk 33
 

As of today, our account cumulative return is 35.15% (note, data in this section are since March 13, 2021, only as that is the date we started tracking these metrics. Thus the results are skewed a bit and will show full picture next year.).

 

Conclusion of our investing and trading report

 

This week our options trading was within our expectations and I believe, the rest of the month will be even better.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares and continue building our cash reserves so we have enough cash to sustain any market corrections and be able to buy depressed stocks.

We will report our next week’s results next Saturday. Until then, good luck and good trading!




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Posted by Martin August 14, 2021
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2021 Week 32 investing and trading report


The second week of August is behind us. In this investing and trading report, we will show that it was a successful week once again although our options income was smaller than in previous months. But it can still all change in the next two weeks.

The biggest achievement last week was our dividend income and net-liq growth. As you will see below, our dividend income met projections for the first time since we started building this account. We exceeded that income expectation a bit. We are on the path to receiving the entire $4,118 annual dividend income.

Our account net liquidating value also jumped more than expected. Partially due to more of our open options positions being set to expire (all look to become worthless so far), and some being rolled releasing a lot of buying power that also has an impact on our net-liq.
 

Here is our investing and trading report:

 

Account Value: $79,450.71 $2,425.83 3.15%
Options trading results
Options Premiums Received: $1,670.00    
01 January 2021 Options: $4,209.00 +16.65%  
02 February 2021 Options: $4,884.00 +15.41%  
03 March 2021 Options: $5,258.00 +12.79%  
04 April 2021 Options: $2,336.00 +4.30%  
05 May 2021 Options: $6,346.00 +9.22%  
06 June 2021 Options: $4,677.00 +6.37%  
07 July 2021 Options: $3,865.00 +5.14%  
08 August 2021 Options: $2,197.00 +2.77%  
Options Premiums YTD: $33,772.00 +42.51%  
Dividend income results
Dividends Received: $460.13    
01 January 2021 Dividends: $53.04    
02 February 2021 Dividends: $63.00    
03 March 2021 Dividends: $30.31    
04 April 2021 Dividends: $139.70    
05 May 2021 Dividends: $167.45    
06 June 2021 Dividends: $168.56    
07 July 2021 Dividends: $228.62    
08 August 2021 Dividends: $467.41    
Dividends YTD: $1,359.57    
Portfolio metrics
Portfolio Yield: 4.67%    
Portfolio Dividend Growth: 8.13%    
Ann. Div Income & YOC in 10 yrs: $17,877.34 18.75%  
Ann. Div Income & YOC in 20 yrs: $155,595.08 163.20%  
Ann. Div Income & YOC in 25 yrs: $735,794.76 771.76%  
Ann. Div Income & YOC in 30 yrs: $5,579,925.90 5,852.64%  
Portfolio Alpha: 35.39%    
Portfolio Weighted Beta: 0.68    
CAGR: 713.08%    
AROC: 32.31%    
TROC: 19.12%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 126.89% Accomplished
2021 Portfolio Value Goal: $42,344.06 187.63% Accomplished

 

Last week, we accomplished our dividend income goal for 2021. But our account is set for larger income for the rest of the year and next year.

 

Dividend Investing and Trading Report

 
Last week, we have received a $460.13 dividends income. Our stock holdings and dividend income appear to be in sync as of today. We have enough stock holdings to generate $4,184.79 annual dividend income and our August dividend income projection was $439.75. Last week, we have received $467.41 total and we beat the projection. As this chart indicates, we should be in line with the projected income.

Last week, our dividend income reached 126.89% of our dividend income goal. We projected to receive $1,071 in dividends in 2021. Our growth was fast and we have received $1,359.57.

Here are our stock holdings that contribute to our dividend income:

 
Annual Dividend Payout week 32
 

Options Investing and Trading Report

 
Last week we again rolled options that got in trouble. The biggest trouble but also money maker was BABA. We rolled pre-emptively our strangles to lower our puts as it seems, BABA is on the way down to $100 a share. So we wanted to give our trade more room to absorb this downtrend.

We also rolled trades against MU, PMT, KBE, TSN, and SNOW. We rolled MU as it suddenly tanked by more than 7% on Morgan Stanley’s warning and price target reduction. In my opinion, the market over-reacted. But we had to adjust our strangles to keep them safe.

These rolls also released a significant amount of buying power and had a positive impact on our net-liq.

Our options positions now have 12 trades set to expire on August 20th. When those trades expire, we will re-enter new trades. We will only replace the expired trades and we will not be adding any new ones for the rest of the year to consolidate our gains and account.

We converted our call side against SNOW’s Iron Condor into a put spread as SNOW is rallying and constantly challenging our calls. Rolling call spreads is difficult and almost impossible for credit. That’s why I do not like spreads. Hard to manage and adjust them. So the best approach was to convert our SNOW call spread to another put spread. Now, both put spreads (the original one and the new one) are set to expire worthless.
 

You can watch all our trades in this spreadsheet. You can watch the spreadsheet and look for a “NEW” indication next to the trading date. When the indicator shows up, it is typically good for up to 3 days to follow that trade.
 

Expected Future Dividend Income

 
As the table at the beginning of this report indicates, our aggressive dividend growth stocks accumulation is starting to show significant progress in our current and future dividends income. Our portfolio dividend yield and dividend growth will be bringing us almost $155,595.08 in 20 years and $5,579,925.90 in 30 years. I wish, I had that $5.5 million income now. But that is the fate of dividend growth investing. It is not a quick rich scheme and building an account takes time.

We will keep aggressively accumulating dividend growth stocks to generate liveable income sooner than in 20 years. And the portfolio is starting to show this to be happening. In just 10 years, we will start receiving $17,877.34 in today’s dollars. It is not bad considering that in March 2021 it was only $3,202.52 in projected future dividends.

 
Our projected annual dividend income in 10 years is $17,877.34 but that is if we do absolutely nothing and let our positions grow on their own.

But as of today, thanks to our aggressive accumulation and dividend reinvesting, we are set to receive a $4,184.79 annual dividend income. We are 23% of our 10 year goal! True, we will need a bigger income than $17k in ten years, but this indicates that we have the potential of reaching our dividend income goal sooner than planned.

 
Future Divi on YOC week 32
 

The chart above shows how our future dividend income is based on the future yield on cost and what dividend income we may expect in the future. The expected dividend growth depends on what stocks we are adding to our portfolio and the stocks’ 3 years average dividend growth rate. It is interesting to see what passive income we may enjoy 10, 20, 25, or 30 years from now.

 

Market value of our holdings

 
Our non-adjusted stock holdings market value increased from $100,173.83 to $103,867.40.

As the markets and businesses continue growing, we expect the value of our holdings to grow even more. We are also building cash reserves to buy depressed stocks during selloffs and corrections as well as negative analysts reports (as long as the company is still good long term).

 
Stock holdings week 32
 

We are accumulating the dividend growth stocks (and some income-only stocks) not only to build a strong dividend income but also to create a “rental property” in our portfolio that can be monetized and generate additional income. This strategy will also provide safety for our strangles and cover our call side.

Our goal is to accumulate 100 shares of each stock of our interest and we are getting to that goal.
 

Investing and trading ROI

 

Our options trading delivered a 2.77% monthly ROI in July 2021, totaling a 42.51% ROI YTD. We are getting close to our 45% annual revenue selling options against dividend stocks!

Our account grew by 286.20% beating our projections and the market.
 

Our options trading averaged $4,221.50 per month this year. If this trend continues, we are on track to make $50,658.00 trading options in 2021. As of today, we have made $33,772.00 trading options. We are over halfway of the projected annual income.
 

Old SPX trades repair

 

This week, we didn’t adjust any SPX trades. Our goal is to reach a level that we will be eligible for portfolio margin (PM). Once that happens, we plan on converting the existing SPX Iron Condors to strangles and trade these positions as strangles.

With RegT margin, the capital requirements would be approx. $66,586.06 and that is beyond our means. With PM the requirement for margin would drop to around $10k. That is doable in our account. Once we reach this level, we will start adjusting our SPX trades accordingly. Until then, we will just roll these trades around.

 

Accumulating Growth Stocks

 

Last week, we didn’t add any growth stocks to our holdings.

Our plan for the rest of the year is to accumulate cash. We only add dividend growth stocks when an opportunity shows up. Our rule for the rest of the year is to use 20% of our available buying power that is above $2,000 to buy new shares per week. The rest of the BP will be kept intact to grow our cash reserves.

 

Accumulating Dividend Growth Stocks

 

Last week, we added 6 shares of VICI, 15 shares of ICSH, 5 shares of MU, and 5 shares of CLX. The MU and CLX purchases were an opportunity to buy a depressed stock. MU’s fair value is $89.54, the current price $70.92; CLX’s fair value is $124.19 the current price is $168.45. The stock retreated strongly from the recent highs (as Covid fades away, the analysts think that there will no longer be a need for cleaning supplies).

In the upcoming weeks, we will continue to accumulate the higher yield income stocks to boost our income and reinvest the proceeds but within our share purchasing plan for the rest of the year (see above section).

Our goal is to reach 100 shares of high-quality dividend stocks and build a weekly dividend income as per this calendar, but we have made no changes to this goal last week:
 

Weekly dividends income calendar
 
You can see the entire spreadsheet here.

 

Market Outlook

 

The market has been in a fairly long (multi-month) consolidation with a slightly upward move. Last week, we started seeing breakouts. DJI broke above 35,000 level, finally, after several months of punching that level for the last four months. SPX had a consolidation too but it was not as obvious as with DJI.

 
Market Outlook week 32
 

As the chart above shows, the SPX is clearly in a solid uptrend. It then went to a month and a half long consolidation (from May to June 20), broke up, retested the former resistance, continued up and into a month-long consolidation. We are now heading higher again.

 
Market Outlook week 32
 

The DJI was in a four-month-long consolidation and it was more obvious. It broke up last Friday and we will also be heading higher. Why? Earnings.

We just finished a 2Q earnings season (91% of companies already reported), and 87% of companies reported positive earnings and earnings surprises. For 2Q, the earnings growth for S&P500 was 89.3%, the highest growth since 2009, and revenue growth was 24.9%. It is the earnings that drive the markets higher. Investors out there, mainly new ones, fail to understand this and put the S&P500 valuation into perspective.

The other day I have seen an investor on social media posting that he has bought puts against SPY and QQQ with a comment, that he: “hopes that the markets will drop next week.” When I told him that he appears to be trading hopes and wishes, he replied that he; “also trades technicals and that the markets are at all-time highs.” Yes, they are at ATH. And they will be there for some time, and they will be creating more ATH in the coming weeks. Why? Again. Earnings.

 

Market Valuation

 

In a bull market like the one we have, you need to understand that there will always be some extended valuation and that investors will pay some premiums. In the bear market, the prices will also tend to overshoot and show lower valuations than what the reality will be (offering great opportunities). Using P/E as a valuation metric without perspective is wrong. P/E is a lagging metrics and has zero, let me repeat, zero, predicting value. It takes into account past data and calculates P/E. But it all already happened and there is no guarantee that it will happen in the future.

 

Market Future Expectations

 

The markets are pricing in the future expectations. Yes, we can debate the methodology of deriving that expectation. We take the past data and project them into the future to come up with expectations.
 

If the expectations are higher than today, the markets go up.
If the companies beat those expectations, the markets will continue going even higher, as long as the expectations for the next season are higher than prior ones.
If the companies fail to meet or beat those expectations, expect a correction, usually accompanied by gloomy expectations for the next season.
 

And what are the economists’ expectations for 3Q?

For 3Q the earnings growth projection is 27.8%, revenue growth is 14.5%.
For 4Q the earnings growth projection is 21.3%, revenue growth is 11.0%.
For the entire 2021, the earnings growth projection is 41.9% and revenue growth is 14.5%.
 

If you are shorting this market, hoping that it will go down, you are ignoring reality and standing in front of a very fast-moving freight train.

 

Intrinsic value and price target of the market

 

Based on the earnings, momentum, and projections, I expect this market to go to $4,500 in the near term and $4,725 by the end of the year. Next year, I expect the market to finish at $5,000 to $5,145 level.

Will we see a correction? We may. It will not be economy driven correction though. We may see some outside events causing the market to correct. It may be the Delta variant of Covid, FED announcements, a sudden spike in interest rates as we saw a few weeks ago, or any other catalyst. But if the earnings projections and business performance remain intact, these corrections will be short-lived. And unpredictable.

 
Market Outlook week 32
 

Based on the earnings up to today, the market’s value should be at $4,040.24. But that is past. We need to look into the future. And the future is pricing in a $4,500+ market.

 

Investing and trading report in charts

 

Account Net-Liq

 

TW Account Net-Liq week 32

 

Account Stocks holding

 
TW Account holdings week 32
 

Our stock holdings still do not beat the market but I am positive that the growth will pick up and exceeds the market. We just need time and continue reinvesting the proceeds. S&P 500 grew 54.46% since we opened our portfolio while our portfolio grew 21.19% only. On YTD basis, the S&P 500 grew 24.61% and our portfolio 14.21%.

But the numbers above apply to our stock holdings in our account, not the overall account net-liq growth. Our overall account beats the market growing by 286.20%!
 

Stock holdings Growth YTD

 
TW Account holdings Growth YTD
 

I expect our stock holdings to start outperforming the market as they mature. However, these are just our stock holdings. The entire portfolio beats the market by far thanks to monetizing those positions.

Our goal is to grow this account to $1,000,000.00 value in ten years. We are in year two.

 

Investing and Trading Report – Options Monthly Income

 
TW Options Income week 32
 

Investing and Trading Report – Options Annual Income

 

TW Options Annual Income week 32
 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 32
 

We have accomplished our dividend income goal. We planned to make $1,071 of dividend income this year and we finished receiving $1,359.57. However, we accumulated enough shares to start making $4,184.79 a year.
 

TW Received vs Future Dividends week 32

The chart above shows that our dividend holdings caught up with the dividend payout cycle and we started receiving monthly dividends as projected. For August 2021 the projection was $439.75 and we have received $467.41. For September, our projection is $399.63. If we receive this income (or more), it will confirm that we are now in line with projections.

 

Our account cumulative return

 

The chart below indicates our cumulative adjusted return. It shows how the last week’s selloff shook down our returns but we are recovering along with the market.
 

TW cumulative return wk 32
 

TW win ratio wk 32
 

As of today, our account cumulative return is 38.46% (note, data in this section are since March 13, 2021, only as that is the date we started tracking these metrics. Thus the results are skewed a bit and will show full picture next year.).

 

Conclusion of our investing and trading report

 

This week our options trading was within our expectations and I believe, the rest of the month will be even better.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares and continue building our cash reserves so we have enough cash to sustain any market corrections and be able to buy depressed stocks.

We will report our next week’s results next Saturday. Until then, good luck and good trading!




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Posted by Martin August 08, 2021
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Dividend Growth Stocks to Accumulate in August 2021


I am getting questions about our accounts and subscriptions. I understand, that it is becoming confusing a bit to distinguish among several plans and accounts I am reporting here. So I decided to work on a new website that will be dedicated to our paid subscription only and this blog will remain to report on our main trading account and general trading and investing information.

Before we will be able to separate our websites, we will continue reporting both accounts here.

What we are currently posting here about?
 

Two accounts, two strategies

 

We trade two accounts – our main business account and our challenge account. The challenge account is a paid subscription program designed for new investors who do not have much experience trading options and also have a limited amount of money available to invest and trade. Our goal is to show you step by step how you can start investing and trading options and grow your account from #100 to a lot larger amount (our goal is to reach $75,000). It is not a miraculous way to get rich overnight. Or taking risky trades against meme stocks. It is designed to grow your wealth and preserve it. We want to create small drops of water that will one day grow into a large ocean.

So, unless said otherwise on this blog, all posts are usually about our main business account trading (like this post for example). If we publish a post about our challenge account, we will say that specifically. Do not mix the two together. They have slightly different steps and strategies.

 

Dividend growth stocks to accumulate in August 2021

 

Every month we publish this list of stocks we want to accumulate in our main business portfolio. This list is meant to show stocks that we are currently interested in buying this month. It is not all our holdings! It is not our entire watch list either. It is a list of stocks we want to accumulate now and in the coming months. It is a goal list. Therefore we also indicate the progress of this goal and the percentage of the accumulation process. And again, this list is for our main business account, not the challenge account.

 
August 2021 dividend growth stocks
 

If you are interested in knowing how we select stocks to our watch list, you need to subscribe to our challenge account program where we will be explaining the process.

Do your own due diligence if you decide to invest in these stocks. The information here is believed to be accurate but may have changed since publishing.
 

We will hold these stocks forever. We will sell them only when they no longer meet our dividend investing criteria (for example the company cuts the dividend) or the stock significantly underperform and better opportunities present themselves. If these companies keep paying dividends and increasing them, we will hold.

We will also sell options around these positions to offset our cost basis. During selloffs and recoveries, we may also buy call options to capture the recovery. If you are interested to see what we are buying and what options we are selling/buying, subscribe to our program.
 
 




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Posted by Martin August 08, 2021
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July 2021 $100 Challenge account review


July 2021 is over and here is our challenge account report. In the month of July, we were still accumulating our funds to be able to trade options. At the beginning of August, we opened our first options trade. It may have been a bit early as the trade went shaky a bit and we soon ran out of the available margin. But we rolled the trade a few times and released the buying power.

Now we have to be prepared for some volatility in our account. As the maintenance margin fluctuates, our net-liq will fluctuate too. I am OK with that.

We will continue accumulating stocks we want to use as our “rental” property and we will also start building a position in those stocks we are trading options against. The goal will be to raise the position to 100 shares as quickly as possible to make our call side of our strangles covered.
 

Accumulation phase

 
The account is progressing well and within the proposed goal. We are now trading small trades (strangles) and we will continue accumulating shares for our next options trade.
 

July 2021 Challenge account review

 

MONTH GOAL $$ ACTUAL $$
June 2021: $203.00 $202.67
July 2021: $306.00 $334.75
August 2021: $409.00 $334.75
September 2021: $512.00  
October 2021: $615.00  
November 2021: $718.00  
December 2021: $821.00  
January 2022: $924.00  
February 2022: $1,027.00  
March 2022: $1,130.00  
April 2022: $1,233.00  
May 2022: $1,336.00  

 

$100 Challenge account review

 
From the chart above, the red dot (line) indicates the current account value, compared to the blue line (plan). As of today, we are at the very beginning of the journey.
 

July 2021 Overall Challenge account review

 
The chart below indicates our account value compared to the overall goal and plan to grow $100 investment into a $75,000 portfolio. As of today, we are at the beginning of our journey.

YEAR CONTRIBUTIONS $$ GOAL $$ ACTUAL $$
Year 0: $100.00 $100.00 $100.00
Year 1: $1,300.00 $1,336.00 $334.75
Year 2: $2,500.00 $3,016.96  
Year 3: $3,700.00 $5,303.07  
Year 4: $4,900.00 $8,412.17  
Year 5: $6,100.00 $12,640.55  
Year 6: $7,300.00 $18,391.15  
Year 7: $8,500.00 $26,211.96  
Year 8: $9,700.00 $36,848.27  
Year 9: $10,900.00 $51,313.64  
Year 10: $12,100.00 $70,986.56  

 

$100 Challenge account review goal

 

June 2021 Cumulative return Challenge account review

 

As of today, our challenge account provided a -11.23% monthly cumulative return.
 

$100 Challenge account review goal

 
$100 Challenge account review goal

 

If you want to see what investments we take, what trades and strategies we will use to grow this small account join our program today and grow your money too. We engage in safe investments, select strategies to maximize winning trades, and grow our portfolio. And you can do it too, today! We do not provide quick rich promises, gambling, or reckless strategies. We want our portfolio to grow steadily and preserving our capital while maximizing returns.

 

 




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Posted by Martin August 07, 2021
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2021 Weeks 30 & 31 investing and trading report


July 2021 is behind us and we can close the books for week #30. We can also report our first week of August 2021 (week #31). I was on vacation last week of July and I was not able to report July trading, so I will do so here.

Last week of July we received $537.00 of options premiums ending the month of July at $3,865.00 total premiums received. Our dividend income brought in $56.95 finishing the month at $228.62.

Below is our August week #31 report.
 

Here is our investing and trading report:

 

Account Value: $77,024.88 $1,885.18 2.51%
Options trading results
Options Premiums Received: $527.00    
01 January 2021 Options: $4,209.00 +16.65%  
02 February 2021 Options: $4,884.00 +15.41%  
03 March 2021 Options: $5,258.00 +12.79%  
04 April 2021 Options: $2,336.00 +4.30%  
05 May 2021 Options: $6,346.00 +9.22%  
06 June 2021 Options: $4,677.00 +6.37%  
07 July 2021 Options: $3,865.00 +5.14%  
08 August 2021 Options: $527.00 +0.68%  
Options Premiums YTD: $32,102.00 +41.68%  
Dividend income results
Dividends Received: $7.28    
01 January 2021 Dividends: $53.04    
02 February 2021 Dividends: $63.00    
03 March 2021 Dividends: $30.31    
04 April 2021 Dividends: $139.70    
05 May 2021 Dividends: $167.45    
06 June 2021 Dividends: $168.56    
07 July 2021 Dividends: $228.62    
08 August 2021 Dividends: $7.28    
Dividends YTD: $899.44    
Portfolio metrics
Portfolio Yield: 4.70%    
Portfolio Dividend Growth: 8.13%    
Ann. Div Income & YOC in 10 yrs: $17,666.52 18.95%  
Ann. Div Income & YOC in 20 yrs: $155,096.04 166.38%  
Ann. Div Income & YOC in 25 yrs: $738,559.26 792.29%  
Ann. Div Income & YOC in 30 yrs: $5,653,530.69 6,064.83%  
Portfolio Alpha: 34.44%    
Portfolio Weighted Beta: 0.69    
CAGR: 716.27%    
AROC: 43.27%    
TROC: 19.06%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 83.95%  
2021 Portfolio Value Goal: $42,344.06 181.90% Accomplished

 

Dividend Investing and Trading Report

 
Last week, we have received a $7.28 dividends income. According to our holdings currently on our balance sheet, all stocks should generate $4,082.46 annual dividend income. We are not receiving these dividends yet because many of the stocks were purchased recently and we missed their most recent dividends. But next year, we should be receiving the full amount.

The chart below indicates our current annual dividend payout from our dividend stock holdings.

Last week, our dividend income reached 83.95% of our dividend income goal.

 
Annual Dividend Payout week 31
 

Options Investing and Trading Report

 
Last week we rolled options that got in trouble. We were not opening any new trades. Just managing the old ones. We rolled OXY, PBCT, XOM, TSLA, AES, and BA. The purpose of rolling those trades was to move the stock price to the center of the strangle. That releases a significant amount of buying power. These adjustments also delivered nice credits.
 

You can watch all our trades in this spreadsheet and you can also subscribe to our newsletter for our trade alerts.
 

Expected Future Dividend Income

 
As the table at the beginning of this report indicates, our aggressive dividend growth stocks accumulation is starting to show significant progress in our future dividends income. Our portfolio dividend yield and dividend growth will be bringing us almost $155,096.04 in 20 years and $5,653,530.69 in 30 years. I wish, I had that $5.6 million income now. But that is the fate of dividend growth investing. It is not a quick rich scheme and building an account takes time.

We will keep aggressively accumulating dividend growth stocks to generate liveable income sooner than in 20 years. And the portfolio is starting to show this to be happening. In just 10 years, we will start receiving $17,666.52 in today’s dollars. It is not bad considering that in March 2021 it was only $3,202.52 in projected future dividends.

 
Future Divi on YOC week 31
 

The chart above shows how our future dividend income is based on the future yield on cost and what dividend income we may expect in the future. The expected dividend growth depends on what stocks we are adding to our portfolio and the stocks’ 3 years average dividend growth rate. It is interesting to see what passive income we may enjoy 10, 20, 25, or 30 years from now.

 

Market value of our holdings

 
Our non-adjusted stock holdings market value increased from $97,113.20 to $100,173.83.

Our holdings reached $100k market value. It is a good milestone to celebrate.

 
Stock holdings week 31
 

Our goal is to accumulate 100 shares of each stock of our interest and we are getting to that goal.
 

Investing and trading ROI

 

Our options trading delivered a 0.68% monthly ROI in July 2021, totaling a 41.68% ROI YTD. We are getting close to our 45% annual revenue selling options against dividend stocks!

Our account grew by 274.41% this year despite very slow growth in June and July.
 

Our options trading averaged $4,012.75 per month this year. If this trend continues, we are on track to make $48,153.00 trading options in 2021. As of today, we have made $32,102.00 trading options. We are halfway to the projected annual income.
 

Old SPX trades repair

 

This week, we didn’t adjust any SPX trade.

 

Accumulating Growth Stocks

 

Last week, we added 1 share of SNOW to our holdings. Our goal is to accumulate 100 shares and start selling covered calls. SNOW is an expensive stock to trade naked strangles, so we will proceed with covered calls once we accumulate enough shares. As of today, we hold 21 shares.

 

Accumulating Dividend Growth Stocks

 

Last week, we added 10 shares of VICI, and 15 shares of ICSH. In the upcoming weeks, we will be accumulating aggressively the higher yield income stocks to boost our dividend income furthermore.

Our goal is to reach 100 shares of high-quality dividend stocks and build a weekly dividend income as per this calendar, but we have made no changes to this goal last week:
 

Weekly dividends income calendar
 
You can see the entire spreadsheet here.

 

Market Outlook

 

I am still bullish and think this market is going higher in the upcoming weeks. The reason? Earnings! No matter what you believe about the current market valuation, this market is heading higher because of earnings. What location is for real estate valuations, earnings is the most important metric for the stock market.

And the second quarter of earnings was spectacular. On a per-share basis, earnings grew from an expected 205 per share to 255 per share. That translates to a $5,533 SPX value. At today’s prices, we have a lot of room to go higher.

 

Investing and trading report in charts

 

Account Net-Liq

 

TW Account Net-Liq week 31

 

Account Stocks holding

 
TW Account holdings week 31
 

Our stock holdings still do not beat the market. However, I expect it to change over time. S&P 500 grew 53.37% since we opened our portfolio while our portfolio grew 19.18% only. On YTD basis, the S&P 500 grew 23.52% and our portfolio 12.20%.

But the numbers above apply to our stock holdings in our account, not the overall account net-liq growth. Our overall account beats the market growing by 274.41%!
 

Stock holdings Growth YTD

 
TW Account holdings Growth YTD
 

I expect our stock holdings to start outperforming the market as they mature. However, these are just our stock holdings. The entire portfolio beats the market by far thanks to monetizing those positions.

Our goal is to grow this account to $1,000,000.00 value in ten years. We are in year two.

 

Investing and Trading Report – Options Monthly Income

 
TW Options Income week 31
 

Investing and Trading Report – Options Annual Income

 

TW Options Annual Income week 31
 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 31
 

We are on track to accomplish our dividend income goal, currently, we are at 83.95% of the goal to reach $1,071 of dividend income this year. Currently, we accumulated enough shares to receive $4,082.46 in annual dividends if we have held through the entire dividend cycle.
 

TW Received vs Future Dividends week 31

The chart above is the corrected chart comparing the projected MONTHLY dividend income vs received dividend income. And again, the projected dividend income is based on the stock holdings up to date. That is the income we would have received if we have held over the entire dividend cycle.

 

Our account cumulative return

 

The chart below indicates our cumulative adjusted return. It shows how the last week’s selloff shook down our returns but we are recovering along with the market.
 

TW cumulative return wk 31
 

TW win ratio wk 31
 

As of today, our account cumulative return is 34.23% (note, data in this section are since March 13, 2021, only as that is the date we started tracking these metrics. Thus the results are skewed a bit and will show full picture next year.).

 

Conclusion of our investing and trading report

 

This week our options trading exceeded our expectations. I hope, the rest of the month will be even better.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares. We will also replenish our cash reserves to bring them back to 25% of our current net-liq value.

We will report our next week’s results next Saturday. Until then, good luck and good trading!




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Posted by Martin July 24, 2021
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2021 Week 29 investing and trading report


The third week of July is behind us. I am on a vacation and it is really difficult to do anything when you have to attend family and invest as well, so this investing and trading report took a bit more time to complete than usual. My next week will be probably late too.

Last week’s investing and trading were good. We made nice options premiums income receiving $1,245.00 and OK dividend income making $14.27. Out net-liq was stangating, though. But let’s quickly review the last week’s report.
 

Here is our investing and trading report:

 

Account Value: $73,739.67 $5.68 0.01%
Options trading results
Options Premiums Received: $1,245.00    
01 January 2021 Options: $4,209.00 +16.65%  
02 February 2021 Options: $4,884.00 +15.41%  
03 March 2021 Options: $5,258.00 +12.79%  
04 April 2021 Options: $2,336.00 +4.30%  
05 May 2021 Options: $6,346.00 +9.22%  
05 June 2021 Options: $4,677.00 +6.37%  
06 July 2021 Options: $3,328.00 +4.51%  
Options Premiums YTD: $31,038.00 +42.09%  
Dividend income results
Dividends Received: $14.27    
01 January 2021 Dividends: $53.04    
02 February 2021 Dividends: $63.00    
03 March 2021 Dividends: $30.31    
04 April 2021 Dividends: $139.70    
05 May 2021 Dividends: $167.45    
06 June 2021 Dividends: $168.56    
06 July 2021 Dividends: $171.67    
Dividends YTD: $835.21    
Portfolio metrics
Portfolio Yield: 4.67%    
Portfolio Dividend Growth: 8.47%    
Ann. Div Income & YOC in 10 yrs: $17,811.10 19.50%  
Ann. Div Income & YOC in 20 yrs: $169,834.32 185.93%  
Ann. Div Income & YOC in 25 yrs: $876,830.08 959.91%  
Ann. Div Income & YOC in 30 yrs: $7,612,835.00 8,334.19%  
Portfolio Alpha: 34.65%    
Portfolio Weighted Beta: 0.71    
CAGR: 729.45%    
AROC: 31.69%    
TROC: 19.94%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 77.95%  
2021 Portfolio Value Goal: $42,344.06 174.14% Accomplished

 

Dividend Investing and Trading Report

 
Last week, we have received a $14.27 dividends income. According to our holdings currently on our balance sheet, all stocks should generate $4,110.62 annual dividend income. We are not receiving these dividends yet because many of the stocks were purchased recently and we missed their most recent dividends. But next year, we should be receiving the full amount.

The chart below indicates our current annual dividend payout from our dividend stock holdings.

Last week, our dividend income reached 77.95% of our dividend income goal.

 
Annual Dividend Payout week 29
 

Options Investing and Trading Report

 
Last week we reopened all trades that expired the previous week. We opened new strangles against APAM, AES, KBE, O, PPL, and OXY. We rolled a few existing trades, and we opened a new long LEAPS trade against SPLG. We also started selling covered calls against that LEAPS option.

The new trades and adjustments delivered $1,245.00 options premiums last week.
 

You can watch all our trades in this spreadsheet and you can also subscribe to our newsletter for our trade alerts.
 

Expected Future Dividend Income

 
As the table at the beginning of this report indicates, our aggressive dividend growth stocks accumulation is starting to show significant progress in our future dividends income. Our portfolio dividend yield and dividend growth will be bringing us almost $169,834.32 in 20 years and $7,612,835.00 in 30 years. I wish, I had that $7 million income now. But that is the fate of dividend growth investing. It is not a quick rich scheme and building an account takes time.

We will keep aggressively accumulating dividend growth stocks to generate liveable income sooner than in 20 years. And the portfolio is starting to show this to be happening. In just 10 years, we will start receiving $17,811.10 in today’s dollars. It is not bad considering that in March 2021 it was only $3,202.52 in projected future dividends.

 
Future Divi on YOC week 29
 

The chart above shows how our future dividend income is based on the future yield on cost and what dividend income we may expect in the future. The expected dividend growth depends on what stocks we are adding to our portfolio and the stocks’ 3 years average dividend growth rate. It is interesting to see what passive income we may enjoy 10, 20, 25, or 30 years from now.

 

Market value of our holdings

 
Our non-adjusted stock holdings market value increased from $94,437.23 to $97,113.20.

 
Stock holdings week 29
 

Our goal is to accumulate 100 shares of each stock of our interest and we are getting to that goal.
 

Investing and trading ROI

 

Our options trading delivered a 4.51% monthly ROI in July 2021, totaling a 42.09% ROI YTD. We are getting close to our 45% annual revenue selling options against dividend stocks!

Our account grew by 258.44% this year despite very slow growth in June and July.
 

Our options trading averaged $4,434.00 per month this year. If this trend continues, we are on track to make $53,208.00 trading options in 2021. As of today, we have made $31,038.00 trading options. We are halfway to the projected annual income.
 

Old SPX trades repair

 

This week, we didn’t adjust any SPX trade.

 

Accumulating Growth Stocks

 

Last week, we didn’t add any positions.

 

Accumulating Dividend Growth Stocks

 

Last week, we added 50 shares of QYLD, and 15 shares of ICSH. In the upcoming weeks, we will be accumulating aggressively the higher yield income stocks to boost our dividend income furthermore.

Our goal is to reach 100 shares of high-quality dividend stocks and build a weekly dividend income as per this calendar, but we have made no changes to this goal last week:
 

Weekly dividends income calendar
 
You can see the entire spreadsheet here.

 

Investing and trading report in charts

 

Account Net-Liq

 

TW Account Net-Liq week 28

 

Account Stocks holding

 
TW Account holdings week 29
 

Our stock holdings still do not beat the market. However, I expect it to change over time. S&P 500 grew 52.51% since we opened our portfolio while our portfolio grew 18.05% only. On YTD basis, the S&P 500 grew 22.67% and our portfolio 11.07%.

But the numbers above apply to our stock holdings in our account, not the overall account net-liq growth. Our overall account beats the market growing by 258.44%!
 

Stock holdings Growth YTD

 
TW Account holdings Growth YTD
 

I expect our stock holdings to start outperforming the market as they mature. However, these are just our stock holdings. The entire portfolio beats the market by far thanks to monetizing those positions.

Our goal is to grow this account to $1,000,000.00 value in ten years. We are in year two.

 

Investing and Trading Report – Options Monthly Income

 
TW Options Income week 29
 

Investing and Trading Report – Options Annual Income

 

TW Options Annual Income week 29
 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 29
 

We are on track to accomplish our dividend income goal, currently, we are at 77.95% of the goal to reach $1,071 of dividend income this year. Currently, we accumulated enough shares to receive $4,110.62 in annual dividends if we have held through the entire dividend cycle.
 

TW Received vs Future Dividends week 29

The chart above is the corrected chart comparing the projected MONTHLY dividend income vs received dividend income. And again, the projected dividend income is based on the stock holdings up to date. That is the income we would have received if we have held over the entire dividend cycle.

 

Our account cumulative return

 

The chart below indicates our cumulative adjusted return. It shows how the last week’s selloff shook down our returns but we are recovering along with the market.
 

TW cumulative return wk 29
 

TW win ratio wk 29
 

As of today, our account cumulative return is 28.51% (note, data in this section are since March 13, 2021, only as that is the date we started tracking these metrics. Thus the results are skewed a bit and will show full picture next year.).

 

Conclusion of our investing and trading report

 

This week our options trading exceeded our expectations. I hope, the rest of the month will be even better.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares. We will also replenish our cash reserves to bring them back to 25% of our current net-liq value.

We will report our next week’s results next Saturday. Until then, good luck and good trading!




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Posted by Martin July 18, 2021
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2021 Week 28 investing and trading report


Another week of July is over and it is time to provide our weekly investing and trading report for our main business account. We run two accounts – one account is our main business account where we trade options against dividend stocks we either own or plan on owning. Our second account is a challenge account that is designed for beginning investors starting with little money to invest and grow their account from $100 to $75,000. We provide a report of our business account (the main account) every Saturday on weekly basis and we provide our challenge account review every month on Monday evening at the beginning of each month.
 

Closing strangles positions

 
When we open a new strangle trade as I wrote about last week our main goal is to keep that trade running all the way to expiration. If everything goes well and the stock doesn’t move violently to either side, we let it go and let it expire.

Sometimes, the stock runs up or down hard, and either our call or put side gets challenged. That is the time we start watching our position carefully and if any of this situation happens we roll the trade:
&nbs;

The challenged side gets beyond delta 30

 

In this case, we review how much buying power would be released if we roll the trade. If the roll releases $800, $1,000, $2,000, or more of the buying power, we will roll the trade. But it must be a roll for credit. If a rolling trade would result in a debit trade, we would probably let it go and accept the assignment. But if the trade was naked and we do not have enough cash (or 100 shares) to accept the assignment, we roll farther away in time to make sure the trade will bring in credit, even a small one.
&nbs;

The challenged side gets in the money

 

A stock drops so fast that we are unable to roll soon enough to keep the price between the strikes. In this case, we roll the trade for sure. We roll lower (or higher) and away in time. If the stock was near the money or at the money (but still in the money), we can wait a bit or we can roll in the next expiration day, and we roll the challenged side out of the money. But again, such rolling must result in a credit. If the next expiration day rolling still requires debit, we go further away in time and we go as far away as it turns from a debit trade to credit trade.

The challenged side gets deep in the money

 

If the stock gets deep in the money due to a market selloff, we again do the exact same moves as described above but we do not go into the next expiration day. We go to 90 DTE or farther away. Why? We want to avoid early assignments. We then maintain that trade at 90 DTE or farther until we are able to roll the trade closer to the money. In order to roll deep in the money strangle, we sometimes have to change the trade to a staddle (meaning we bring the trade calls and puts strikes together). That helps in rolling the trade away for credit.
trade.

None of the above helps

 

If none of the above-mentioned strategies help, for example rolling would require adding more money or more buying power at the bad trade, we then take assignments. But if we do not have enough cash for put assignment, we start rolling the trade away in time as is. No changing of strikes, only moving it away in time. Usually, the opposite side brings in enough credit to offset the cost of the challenged side. This buys us time to accumulate cash and take a stock assignment. If it is a call side, we start hedging the trade by buying shares to cover the call side. If this is not feasible (for example our call strike is at $30 a share and the stock is trading at $100 a share then hedging makes no sense. In this case, I add a put and sell 2 puts to roll 1 call. It is a kinda uneven strangle. But it takes planning, releasing cash for the new obligations. If your account is stressed, then just roll until you are ready to let it go (or the market decides to work with you, and the stock retreats and allows you to roll up (or get out).
trade.

Just do it

 
When doing all these adjustments, you must do it. You must try it. I always play with those adjustments, meaning I am simulating them. I do not place those trades but I simulate the adjustments to see what the trade would look like and what the result would look like if I do that adjustment. When I am happy with what I see, I do it. If not, I rather wait. It’s a game and you have to play it. If you are not sure, just roll the entire trade away as is – same strikes just longer expiration until you find a solution you like.

As I said a few times before, options are a fluid trading vehicle. No rules are set in stone. The best way to find a solution to a bad trade is to play with it. What worked once may not work again this time and something else would work better.

 

Here is our investing and trading report:

 

Account Value: $73,733.99 -$254.28 -0.34%
Options trading results
Options Premiums Received: $719.00    
01 January 2021 Options: $4,209.00 +16.65%  
02 February 2021 Options: $4,884.00 +15.41%  
03 March 2021 Options: $5,258.00 +12.79%  
04 April 2021 Options: $2,336.00 +4.30%  
05 May 2021 Options: $6,346.00 +9.22%  
05 June 2021 Options: $4,677.00 +6.37%  
06 July 2021 Options: $2,083.00 +2.83%  
Options Premiums YTD: $29,793.00 +40.41%  
Dividend income results
Dividends Received: $23.55    
01 January 2021 Dividends: $53.04    
02 February 2021 Dividends: $63.00    
03 March 2021 Dividends: $30.31    
04 April 2021 Dividends: $139.70    
05 May 2021 Dividends: $167.45    
06 June 2021 Dividends: $168.56    
06 July 2021 Dividends: $157.40    
Dividends YTD: $820.94    
Portfolio metrics
Portfolio Yield: 4.69%    
Portfolio Dividend Growth: 8.47%    
Ann. Div Income & YOC in 10 yrs: $17,602.81 19.67%  
Ann. Div Income & YOC in 20 yrs: $169,107.79 189.00%  
Ann. Div Income & YOC in 25 yrs: $878,423.27 981.73%  
Ann. Div Income & YOC in 30 yrs: $7,689,838.06 8,594.24%  
Portfolio Alpha: 32.92%    
Portfolio Weighted Beta: 0.72    
CAGR: 744.27%    
AROC: 31.64%    
TROC: 19.63%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 76.62%  
2021 Portfolio Value Goal: $42,344.06 174.13% Accomplished

 

Dividend Investing and Trading Report

 
Last week, we have received a $23.55 dividends income. We feel that the income will be growing faster as more of our holdings mature and become eligible for dividend payouts. According to our holdings currently on our balance sheet, all stocks should generate $4,044.00 annual dividend income. It is not as of yet because many of the stocks were purchased recently and we missed their dividend. But next year, we should be receiving the full amount.

The chart below indicates our current annual dividend payout from our dividend stock holdings.

Last week, our dividend income reached 76.62% of our dividend income goal.

 
Annual Dividend Payout week 28
 

Options Investing and Trading Report

 
Last week we rolled a few trades to release a stressed buying power in our account. We rolled TSLA, SPCE, SPX, BA, AAPL, CROX, CSCO, MU, TSN, OXY, DKNG, and IJS. These trades are now in good shape and some were ready to expire worthless for a full profit.

We opened new trades against QYLD (short put), and PMT (short put).

We had 8 trades that expired on Friday:
 

1 PPL Jul16 26 put / 30 call strangle for 1.47 credit
1 KBE Jul16 47 put / 61 call strangle for 0.80 credit
1 KBE Jul16 54 covered call for 0.27 credit
1 APAM Jul16 45 put / 55 call strangle for 1.60 credit
1 AES Jul16 23 put / 27 call strangle for 0.55 credit
1 SNOW Jul16 295/300 call credit spread for 1.49 credit
1 OXY Jul16 25 put / 33 call strangle for 0.52 credit
1 O Jul16 65 put for 0.37 credit

 

We will be reopening these trades during the next week or two.

The new trades and adjustments delivered $719.00 options premiums last week.
 

You can watch all our trades in this spreadsheet and you can also subscribe to our newsletter for our trade alerts.
 

Expected Future Dividend Income

 
As the table at the beginning of this report indicates, our aggressive dividend growth stocks accumulation is starting to show significant progress in our future dividends income. Our portfolio dividend yield and dividend growth will be bringing us almost $169,107.79 in 20 years and $7,689,838.06 in 30 years. I wish, I had that $7 million income now. But that is the fate of dividend growth investing. It is not a quick rich scheme and building an account takes time.

We will keep aggressively accumulating dividend growth stocks to generate liveable income sooner than in 20 years. And the portfolio is starting to show this to be happening. In just 10 years, we will start receiving $17,602.81 in today’s dollars. It is not bad considering that in March 2021 it was only $3,202.52 in projected future dividends.

 
Future Divi on YOC week 28
 

The chart above shows how our future dividend income is based on the future yield on cost and what dividend income we may expect in the future. The expected dividend growth depends on what stocks we are adding to our portfolio and the stocks’ 3 years average dividend growth rate. It is interesting to see what passive income we may enjoy 10, 20, 25, or 30 years from now.

 

Market value of our holdings

 
Our non-adjusted stock holdings market value increased from $93,468.90 to $94,437.23. Last week, we added 50 shares of QYLD, 10 shares to ICSH, 1 share of SNOW, and 20 shares to PMT.

We use ICSH as a savings account and as of today, we are mostly in a preservation mode. We feel like our balance sheet is way aggressive and has no cash reserves. Therefore, we are mostly adding money to our cash reserves.

 
Stock holdings week 28
 

Our goal is to accumulate 100 shares of each stock of our interest and we are getting to that goal.
 

Investing and trading ROI

 

Our options trading delivered a 2.83% monthly ROI in July 2021, totaling a 40.41% ROI YTD. We are getting close to our 45% mark!

Our account grew by 258.41% this year despite very slow growth in June and July. I suggest the growth was suppressed by the market volatility and options trades increasing their maintenance requirements that ate the net-liq value. Once the options expire (hopefully) the net liquidating value will go up faster.
 

Our options trading averaged $4,256.14 per month this year. If this trend continues, we are on track to make $51,073.71 trading options in 2021. With the income of $29,793.00 to date, we are half way to this projected income.
 

Old SPX trades repair

 

This week, we rolled our old SPX trades way higher and away in time. I am not yet decided what to do with these positions. My original plan to try to roll it out of the money doesn’t work. So, I am now thinking to keep the trades rolling until I will be able to apply for portfolio margin and convert these Condors into strangles. With a portfolio margin, I will only need about $10,000 buying power per strangles. With a Reg-T margin, I need $55,000 buying power. Not feasible to trade under such circumstances.

 

Accumulating Growth Stocks

 

Last week, we added 1 share to our SNOW position.

 

Accumulating Dividend Growth Stocks

 

Last week, we added 50 shares of QYLD, 10 shares of ICSH, and 20 shares of PMT to our dividend growth positions. In the upcoming weeks, we will be accumulating aggressively the higher yield income stocks to boost our dividend income furthermore.

Our goal is to reach 100 shares of high-quality dividend stocks and build a weekly dividend income as per this calendar, but we have made no changes to this goal last week:
 

Weekly dividends income calendar
 
You can see the entire spreadsheet here.

 

Market Outlook

 

The market was going up last week and it reached (almost) our price target. It got close to it. But that move upwards was not very convincing. It was in fact very weak move and we had a few hiccups on the road up. A week ago, the market dropped on inflation fears but recovered quickly just to lose it all again at the end of this week.

 
SPX July 18 2021 outlook
 

The market is looking for direction. And this trend may continue for a week or two. We may also see a correction of 10% (more or less). And honestly, even though the market may continue higher, I am more and more in favor of seeing a correction sparked by inflation fears.

But I am in the FED camp, or Jerome Powell’s camp, who insists that the inflation is transitory. I agree with that. I agree with renowned economist Lacy Hunt who says inflation is transitory and typical to recovering economies. We had a spike in inflation after every recession. We had a spike in inflation in 2009 after the economy started recovering from the Great Recession and people were predicting another crash. Remember that? Many were predicting a crash all the way until 2013-2014! But that never materialized.

Inflation doesn’t cause a recession. It is an effect of a recession. When businesses came to life after March 2020 40% crash boosted by the US government support and people receiving stimulus checks (in a similar manner as we experienced in 2009) it is obvious that there would be a spike in inflation. And there will be the same exact doom and gloom talk about it.

I still remember some pundits saying in 2009 – 2013 that this would all end badly because FED lowered interest rates to zero, started a huge QE program, and as interest rates started skyrocketing FED would have nothing left to fight it off. Well, 13 years later, history repeats itself.

Here is a video of an interview with Lacy Hunt and his excellent presentation. I would like you to watch it. It will give you a great insight into the economic behavior around recessions. How GDP behaves? Money flow and money supply? Inflation? We have experienced it all in 2009 and people already forgot.

 

 

So, if you see the market selling off on fear of inflation, buy. It is a dip that will leave naysayers and doom predictors biting the dust.

But, this doesn’t mean that the market will not sell-off. As I mentioned above, I expect it to cool off a bit. I expect it to retest our previous breakout and go lower to a $4,250 level. It may be just a one-day dip, quick and fast, that would recover quickly, or it may not materialize at all.

 
SPX July 18 2021 outlook
 

One reason for this expectation not happening is simple – earnings, earnings, earnings. And we just started another earnings season and so far, the companies are beating it. And as in real estate, location is the most important factor driving prices, in the stock market, it is earnings. And the market trails the earnings predictions so far. When we see earnings going down, expect problems:

 
SPX earnings 2021 outlook 28
 

Based on these estimates, the SPX should be trading at $3,394.00, 27% lower than today, and based on the future earnings estimate, the SPX intrinsic value is at $4,119.36 (5% below the current price). The stock market is pricing the price range to be at $4,080.00 and 4575.00. With this cold market looking for a direction, it is difficult to say where it wants to go.

 

Investing and trading report in charts

 

Account Net-Liq

 

TW Account Net-Liq week 28

 

Account Stocks holding

 
TW Account holdings week 28
 

Our stock holdings still do not beat the market. However, I expect it to change over time. S&P 500 grew 49.59% since we opened our portfolio while our portfolio grew 16.39% only. On YTD basis, the S&P 500 grew 19.74% and our portfolio 9.41%.

But the numbers above apply to our stock holdings in our account, not the overall account net-liq growth. Our overall account beats the market growing by 258.41%!
 

Stock holdings Growth YTD

 
TW Account holdings Growth YTD
 

I expect our stock holdings to start outperforming the market as they mature. However, these are just our stock holdings. The entire portfolio beats the market by far thanks to monetizing those positions.

Our goal is to grow this account to $1,000,000.00 value in ten years. We are in year two.

 

Investing and Trading Report – Options Monthly Income

 
TW Options Income week 28
 

Investing and Trading Report – Options Annual Income

 

TW Options Annual Income week 28
 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 28
 

We are on track to accomplish our dividend income goal, currently, we are at 76.62% of the goal to reach $1,071 of dividend income this year. Currently, we accumulated enough shares to receive $4,044.00 in annual dividends if we have held through the entire dividend cycle.
 

TW Received vs Future Dividends week 28

The chart above is the corrected chart comparing the projected MONTHLY dividend income vs received dividend income. And again, the projected dividend income is based on the stock holdings up to date. That is the income we would have received if we have held over the entire dividend cycle.

 

Our account cumulative return

 

The chart below indicates our cumulative adjusted return. It shows how the last week’s selloff shook down our returns but we are recovering along with the market.
 

TW cumulative return wk 28
 

As of today, our account cumulative return is 28.50% (since March 13, 2021).

 

Conclusion of our investing and trading report

 

This week our options trading exceeded our expectations. I hope, the rest of the month will be even better.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares. We will also replenish our cash reserves to bring them back to 25% of our current net-liq value.

We will report our next week’s results next Saturday. Until then, good luck and good trading!




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